Suppose That a Per-Unit Subsidy Is Granted to Each Individual

question 24

Multiple Choice

Suppose that a per-unit subsidy is granted to each individual who consumes a product providing external benefits to society at large. Each individuals demand curve will shift ________, and the market demand curve for the product will shift ________.

• A) to the right; to the right
• B) to the right; to the left
• C) to the left; to the left
• D) to the left; to the right

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Definitions:

Revenue

Income arising in the course of an entity’s ordinary activities.

Entity Wide Basis

An approach to financial reporting that presents the aggregate information of all segments and activities of an entity.

External Revenue

The income that a company generates from its primary business activities outside of its entity, excluding internal transactions.

Competitive Advantage

The attributes that allow an organization to outperform its competitors, including cost structure, product offerings, brand, and customer service.